The Center is a non-profit project that represents class members pro bono.

Monday, November 4, 2013

November 4 Press Release

US SUPREME COURT DENIES FACEBOOK USERS

CY PRES SETTLEMENT CHALLENGE OPPORTUNITY

OPENS DOOR FOR FUTURE CHALLENGES

WASHINGTON, D.C. – The US Supreme Court (SCOTUS) has
declined to hear arguments in Marek v.
Lane, (No. 13-136) a case challenging the fairness, reasonableness and adequacy
of a $6.5 million cy pres settlement
where the only concession Facebook made to settle the claims of millions of
users was to establish a new foundation to educate the public about “user
control” over Internet privacy.

However, in a separate statement, Chief Justice Roberts acknowledged
the need for the Court to address the increasing use of cy pres settlements. He wrote, “…review of this case might not have
afforded the Court an opportunity to address more fundamental concerns
surrounding the use of such remedies in class action litigation, including
when, if ever, such relief should be considered….In a suitable case
this Court may need to clarify the limits on the use of such remedies.”

“We’re hopeful the Court in a future case will address abuse of the cy pres doctrine which has become an
increasingly serious problem that cheats consumers of fair settlements in class
action cases,” said Ted Frank, founder of the Center for Class Action Fairness
and one of the lawyers challenging the Facebook settlement.

Cy pres awards in class
action settlements provide awards be given to charities or foundations instead
of individual consumers. According to legal scholars these awards “create the
potential for conflicts of interest by ensuring that class counsel are able to
reap exorbitant fees regardless of whether the absent class members are
adequately compensated.”